All-night sleep EEG recordings were performed in non-depressed patients with panic disorder, agoraphobia, and a group of age- and sex-matched normal controls. Patients were selected according to DSM-IV and all subjects were studied under drug-free conditions. In addition to sleep continuity disturbances, patients with panic disorder have a reduced percentage of slow wave sleep, mainly due to diminished amounts of stage 4. REM sleep characteristics are identical in the two groups. When depressive co-morbidity and non-specific causes of insomnia are excluded, the sleep EEG of panic patients seems to be characterized by modest changes in sleep continuity and sleep architecture. These findings favour the existence of a neurophysiological frontier between anxiety disorders and depressive illness.